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The latest U.S. housing data contain both disappointing and encouraging news. First the bad news. The latest S&P/Case-Shiller Home Price Index for the top 20 and top 10 cities showed a near-universal decline in prices in the nation's major metropolitan areas, year over year. In November, the 20-city index fell 1.6%, and the 10-city index fell 0.4%, over November 2009.

The prices fell even compared to the previous month: From October to November, the 20-city index fell 1%, while the 10-city index declined 0.8%. Equally distressing, only one city -- San Diego -- in the 20-city index saw a gain from October. And it wasn't much: 0.1% -- hardly enough to warrant singing "California, Here I Come."

Cities that recorded large declines include Detroit, down 2.7%; Atlanta, 2.5%; Chicago, 2.2%; and Cleveland, 2%.

Combine those drops with substantial losses in New York, down 1%; San Francisco, 1.2%; Seattle, 1.1%; and Boston, 1%, and prices are falling at a scope and rate to warrant increasing concern about a double-dip recession in home prices.

A Pickup in Existing Homes

Now the good news. The latest Case-Shiller data is two months behind current conditions, and the more recent data from other housing researchers shows a slightly different picture.

In December, sales of existing homes jumped 12.3% to an annual rate of 5.28 million, according to data compiled by the National Association of Realtors. That's below the 5.44 million-home rate for the same month a year ago, but it's still well above the 40-year average of roughly 3.66 million homes.

So, existing-home sales have clearly rebounded, even though they're substantially below the 7.1 million annual rate reached in 2005, during the housing bubble. It'll be a long time before anything like that rate is seen again.

With existing homes selling at a decent clip, why does it feel like this market isn't gaining traction?

One reason may be the housing euphoria triggered by the 2003-2007 bubble era, which makes the current rate seem like a letdown. Another factor is probably the large supply of unsold existing homes. Inventories slid to an 8.1-month supply in December from 9.5 months in November, but they remain above the three- to five-month average supply of a healthy market.

Excess inventory is one reason why median U.S. existing-home prices have remained virtually unchanged in the past year. The median price totaled $168,800 in December, down 1% from $170,500 in the same month in 2009. That probably accounts for the lack of buzz. Existing homes are selling, but prices are just treading water.

New-Home Sales: Still Too Low

As for new homes, the progress during the past six months has been roughly equivalent to driving on the Washington, D.C., Beltway during rush hour: You're moving, but not very quickly.

New-home sales rose a better-than-expected 17.5% in December from November to a 329,000-home annual rate, but that gain comes from a very low starting point: New-home sales fell to a 47-year low -- to an annual rate of 274,000 homes -- last August, and remained low in November.

Inventories of new homes fell to a 6.9-month supply in December from 8.4 months in November, but it's still high. Even assuming strong U.S. GDP growth of 4%, it will take at least three quarters -- and probably longer -- for new-home sales to return to a more normal 700,000 to 800,000 annual rate. And the days of selling more than 1 million new homes a year, such as during the housing bubble, appear to be long gone -- an anomaly of that era.
What Not to Expect

While the housing sector still can't be called healthy, the existing-home and new-home sales data from late autumn show that it has made modest progress. And while one could make a case that housing -- at least from a price standpoint -- is flirting with a double-dip recession, one also could argue that the dip won't be as deep or as long as the dive that occurred in the Great Recession.

In general, housing remains a buyers' market, not a sellers' market. That means even though local price booms can occur quickly, people buying homes in the next several months shouldn't assume that their new purchase will automatically appreciate 5% to 8% per year. The market just hasn't recovered nearly enough to expect those kinds of gains anytime soon.

Finally, don't expect federal policy, such as a second renewal of the homebuyer credit, to help. Congress is in austerity mode and is more likely to cut spending than to grant tax credits that lower Uncle Sam's tax revenue.

Still, while the housing sector's progress remains sluggish, it is in fact making progress. Further improvement will depend on the country's ability to create and sustain jobs.

it amaze me a 5 room brick house phuldelphia pa was value at 200,000. my parent 40yrs ago brought the a house for only 10,0000 on the same damm block. i sold the house when parents past away for only 25,000. talk about inflation. donot tell me about location location loacating thing.

SOME OF YOU COMMENTING HEAR MAKE ME SICK . NO ONE WANTS TO TAKE BLAME FOR WHAT HAPPENED TO YOUR JOBS AND HOUSING . NO ONE WANTS TO ADMIT THAT LIVING WAY BEYOND YOUR MEANS WOULD ONE DAY CATCH UP TO YOU . DO I HAVE COMPASSION FOR THE 20% + UNEMPLOYED WE HAVE ? THE ANSWER IS YES FOR PART OF THEM , BUT LETS PLACE SOME BLAME ON THEM . WHEN THING WENT TO HELL COMPANY'S STARTED TRIMMING THE FAT . AND THAT MEANT ALL THOSE EMPLOYEES THAT WHERE ALWAYS SOWING UP LATE OR MISSING TIME OR ON THE CELL PHONES MORE THAN THEY WORKED WHERE LET GO . AND ALL WHO WORKED JUST LONG ENOUGH TO START DRAWING UNEMPLOYMENT AGAIN AND AGAIN . I'M NOT SAYING EVERY ONE THAT WAS LET GO FALLS INTO WHAT I AM SAYING BUT IF YOU WHERE MAYBE YOU SHOULD REVALUATE WHAT HAPPENED TO YOU AND WHY . THAT'S ABOUT 10 TO 15% OF YOU THAT WHERE LET GO . I KNOW I'M GOING TO GET A LOT OF NEGATIVE COMMENTS ,BUT JUST LOOK BACK AND REFLECT . I THINK IN OUR NEW TIMES WE ARE LIVING IN IF UNEMPLOYMENT FALLS BELLOW 9% WE ARE DOING GREAT THAT WILL MEAN , THEIRS STILL 90% OF THE WORK FORCE STILL FIGHTING TO MAKE THE AMERICAN DREAM , NOT TO BE DEAD BEFORE WE CAN ENJOY RETIREMENT .

take your deposits out of the bank if you are unhappy with the government.... if the banks don't have your money, then they can't use it to manipulate the economy..... if you have too much cash to put under a mattress, stick it in a stock trading account with check writing privleges and 2.2% interest paid monthly

The liberal media has said the economy is recovering-LIE. Unemployment has been over 9% since spring 2009-worse than the great depression. Obama's trillion dollar deficits are drowning any chance of recovery. His housing policy is non-existant. What has the administration accomplished for the economy? Obama has completely educated the public on pricey "date night"-this is where he and his lovely wife jet off to New York, visit some rich friends, and take in a movie. The cost to you: $250,000. The only ones to make money on his watch: the oil companies from all that fuel he wastes.

The blame game can go on forever and not accomplish anything. Right now, everyone has to learn how to take care of themselves and not rely on the government to help them. Our country was founded by people that had an independent spirit and they all had to work together, whether it be building houses, growing food, starting their own businesses, or taking care of what they did own in their own time and did that without any reservations.

Listen you guys. If you actually listened to the news and paid attention you would know that we made fools of ourselves long ago in the world. Weapons of mass destruction??? Then, we elected GW Bush for a 2nd term. Most of europe wanted to know where we put our brains when we did that.

And rather, at the very least; at a 'minimum'...instead of questioning/wondering why we received no international support....the right-wingers accused the allies of being chickens!...Boycott 'french-fries', no thanks for our help after bailing them out in WW1 and WW2!....Never once, questioning that the USA might be barking up the wrong tree!